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CHAPTER 3. COST IMPACTS OF LEU-TARGET CONVERSION Table 3.8. Impacts of LEU-target conversion as share of reimbursement rate Impact scenario Reference case without FCR Reference case with FCR High infrastructure Low infrastructure Full range Percentage of the 99mTc radiopharmacy dose within the reimbursement rate (cumulative for each stage of the supply chain)1 Irradiator 0.11% 0.14% 0.17% 0.18% 0.15-0.19% Processor 0.78% 0.81% 0.98% 1.02% 0.86-1.16% Generator manufacturer 0.91% 0.95% 1.11% 1.16% 1.00-1.16% Radiopharmacy/nuclear medicine department 4.42% 4.46% 4.62% 4.67% 4.51-4.8% 1. Based on a reimbursement rate of EUR 245. Cost impacts on the overall supply chain resulting from LEU-target conversion As noted in the previous section, the cost impact on the end payer is very small but it is very important that it is paid in order to account for the costs of target conversion upstream. In order to understand the overall cost impacts on the supply chain and on individual facility operators, the NEA modelled the potential cost to the supply chain by applying median values to the range of converting facilities. Table 3.9 presents the results from this analysis. Table 3.9. Cost to supply chain on LEU-target conversion Impact scenario High infrastructure Low infrastructure Full range Total incremental capital costs (EUR) Incremental operating costs over two years (EUR) Cost to supply chain (EUR) Total 93 081 000 96 335 000 55 865 000-198 652 000 Irradiator 3 000 000 2 500 000 0-7 615 000 Processor 12 009 000 10 658 000 9 291 000-26 574 000 Irradiator 633 000 1 681 000 0-2 932 000 Processor 5 812 000 7 154 000 2 675 000-12 881 000 48 MARKET IMPACTS OF CONVERTING TO LOW-ENRICHED URANIUM TARGETS FOR MEDICAL ISOTOPE PRODUCTION, ISBN 978-92-64-99197-2, © OECD 2012 Table 3.9 shows that on a facility basis, the costs are significant. While the previous section indicated that the impacts on the end payer were less than EUR 1 per procedure, the incremental capital costs for irradiators can be up to EUR7.6million, and EUR 26.6 million for a processor, under the worst case. Incremental operating costs are only calculated for two years, as after that time all the global players should be converted and the operating cost impacts would be incorporated into market prices as the new norm. However, during the conversion process and while the market is not 100% based on non-HEU-based 99Mo and/or 99mTc, the operating costs impacts are relevant for converted irradiators and processors. Applying these incremental costs over the converting reactors and processors gives the total cost to the supply chain. To convert the full supply chain to use LEU targets for 99Mo production, the cost to the supply chain will be close to EUR 100 million (higher under a worst case situation). Given that these costs are significant to the facility and to the supply chain overall, and that the decision to convert to using LEU targets is an externality imposed on the market players, there could be a possible role for governments to ensure that costs are manageable or compensated somehow.PDF Image | Market Impacts of Converting to Low-enriched Uranium Targets for Medical Isotope Production
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